Property Market Shows Signs of Recovery
The information in this article is courtesy of iAfrica (Property slump is over! – 21 September 2009).
The latest OOBArometer price index is showing some signs of recovery after it recorded a 6.9% increase in year-on-year house prices. This is the third month in a row that the index showed an improvement.
According to chief executive of OOBA, Rhys Dryer, the biggest drivers of this market recovery is bank lending. There has also been an improvement in competitiveness between banks and an increase in loan approval rates.
The price of an average house now stands at R795 241. Last August this price was R743 403.
The month-on-month average purchase price has also increased by 2.5 percent from R775 172 in July of this year.
The year-on-year average bond size is still down by 5.4% although the month-on-month average approved bond size has shown a 4% improvement.
At the moment buyers are paying an average of 23.1% deposit on the purchase price compared to the 13% paid last year August. However, this percentage points to an improvement on the average deposit required in July 2009 which was 24.2%.
Banks willingness to lend is also being witnessed as the month-on-month average bank decline ratio shows an improvement for the fourth consecutive month. The index also recorded that 19.2% of applications declined by a lender is accepted by another bank.
According to Dyer there are now mounting evidence that the property market is heading towards recovery, which can be seen in increased applications and increased approvals, all driven by improved affordability, relaxation in the bank lending criteria, increased bank competitiveness and increased demand.
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